New Tax Laws For Charitable Contributions

New Tax Break for IRA Owners

1. In tax years 2006 and 2007, an IRA owner, age 70 1/2 or older, can directly transfer up to $100,000 per year to an eligible charity tax free. 

2. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans are not eligible.

3. Funds must be contributed directly from the IRA trustee to the eligible charity. Funds being transfered are not taxable and no deduction is available for the amount given to the charity.

4. Not all charities are eligible.

5. Transferred amounts are counted in determining whether the owner has met the IRA’s required minimum distribution rules.

Monetary Donations

1. Any charitable donation of money must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution.

2. This provision applies to contributions made in taxable years beginning after Aug. 17, 2006. For taxpayers that file returns on a calendar-year basis, including most individuals, the new provision applies to contributions made beginning in 2007.

Contributing Clothing and Household Items

1. Clothing and household items donated after August 17, 2006, must be in good used or better condition.

2. Any single item over $500 may be claimed for a deduction, regardless of its condition, if a qualified appraisal of the item is included with the return. Household items include furniture, furnishings, electronics, appliances, and linens.

3. The fair market value of most clothing and household  items is generally much less than the price paid when new. You should claim only what the item would sell for at a garage sale, a flea market, or a second hand or thrift store.

Garage Sale Pricing

• Board games: $0.25 - $3
• Dolls: $0.50 - $4
• Stuffed animals: $0.50 - $3
• Video games: $1 - $10

• Books (paperback): $0.25 - $1
• Books (hard cover): $1 - $2.50
• VHS tapes: $1
• DVDs: $3 - $5
• CDs: $0.50 - $3

• Televisions: $10 - $30
• DVD Players: $15 - $30
• VCRs: $10 - $15
• Clock radios: $2 - $3
• CD Players: $10 - $15
• Laptops: $20 - $150
• Walkman: $2
• Discman: $5

• Children’s shirts: $0.25 - $1
• Children’s pants: $0.50 - $2
• Children’s shoes: $1
• Jeans: $2 - $4
• T-shirts: $0.50 - $1
• Sweatshirts: $1 - $2.50
• Dress pants: $2 - $4.50
• Sweaters: $2 - $4
• Dresses: $3 - $10
• Shoes: $1 - $4
• Jewelry: $0.25 - $2

• Plates: $0.25 - $2
• Pots and pans: $2 - $10
• Glasses: $0.10 - $1.50
• Plastic food containers: $0.10 - $1 per piece
• Complete sets (dishes, pans, etc.): $5 - $25
• Silverware (complete set): $10 - $20

Garage Sale pricing courtesy of North American Van Lines.